Sustainability Equals Profitability: How Westrock Coffee Transforms Lives in Rwanda
Rwanda’s coffee production is helping to provide a sustainable income to the country’s smallholder farmers, many of whom are widows and orphans of the country’s devastating genocide.
Westrock Coffee Company, led by CEO Scott Ford, is at the vanguard of the movement to improve lives through sustainable capitalism by helping to transform this nation one farmer at a time. Today, the small east-African country of Rwanda boasts some of the highest-quality coffee in the world, but this has not always been the case. Until the mid-1990s, the coffee industry was quasi state-controlled and the farmers received a set — and low — price for semi-washed, commodity grade beans. Scott Ford’s innovative business idea for Westrock Coffee Company helped change the coffee industry for the better.
Thanks to the privatization and liberalization of the coffee industry, the growth of smallholder farmer cooperatives, and the advent of specialty roasters that focus on direct trade with the smallholder farmers and co-ops, Rwanda’s coffee story is evolving into one full of complex flavors and aromas. “That [story] has allowed the Rwandan farmer to experience the fastest growing income stream based on a farm-gate price of any commodity, anywhere in the world,” says Scott Ford, CEO of Westrock Coffee, a specialty roaster based out of Little Rock, Arkansas.
Helping Those in Need
Coffee accounted for between 60% and 80% of total Rwandan export revenue in the 1970s and 1980s. That percentage declined significantly on the back of a worldwide drop in prices for low-grade coffee beans in the early 1990s. Then in 1994, this small country was rocked by a civil war and genocide that took the lives of more than 800,000 people — more than 10% of its then-population of 7 million. In the aftermath, coffee exports declined even further. The smallholder coffee farmers in this very poor country, many of whom were made widows and orphans through the genocide, were devastated.
By the late 1990s, things had begun to change. It started with the privatization and liberalization of the coffee industry as the government began to encourage both entrepreneurship and partnerships with outside agencies and companies. Programs such as the U.S. Department of Commerce’s African Growth and Opportunity Act (AGOA) and the Partnership for Enhancing Agriculture in Rwanda through Linkages (PEARL) — launched by Michigan State University, Texas A&M, USAID, and Rwanda’s Ministry of Education — helped train young Rwandans in agronomy, coffee “cupping”, and quality control management. This training was critical as much of the country’s agronomy skills base was lost due to the genocide. The outside agencies also helped in the construction of coffee washing stations, essential for producing higher quality coffee beans.
Creating a Sustainable Market
For Scott Ford, who founded Westrock Coffee in 2009 to help Rwandan smallholder farmers improve their lives and get the value they deserve for their premium product, the story of the people of Rwanda has a resonance that strikes surprisingly close to home for the Arkansas native. “People ask, `why Africa, why the coffee business?’” He says it is because of the parallels he sees between Rwanda, rural Arkansas in the Depression — and his own family’s history.
Ford’s father, who grew up in rural Arkansas — without running water, electricity, or access to basic health care — was the only one of three siblings to live through the Depression into adulthood. Since those dark times, the family’s fortunes have changed dramatically — as has the state’s. The Ford family built wireless network provider Alltel from a small business into a major U.S. mobile network powerhouse that was sold to Verizon in 2009.
Ford and his family went to Rwanda in the early-2000s to visit an orphanage that they were supporting. “When I was in Rwanda, I saw mothers still living just on the edge, trying to keep their children alive,” he remembers. He felt the need to work to make their lives better, just as individuals and businesses in Arkansas had worked to transform the economy and the lives of countless families after the Depression.
When the poorest of the poor taste the benefit of the free market system, they will never settle for a government that won’t let them have access to that system.
During the visit to Rwanda, Ford and his family had dinner with the country’s President, Paul Kagame (who still holds the office today). “He said to me, ‘If we can create an economy based on the rule of law, zero tolerance for corruption, a respect for the capital that is invested, and the right of the people that have invested it to make a profit and keep that profit — we can actually change the nation.’
Some of President Kagame’s thoughts really resonated for Ford: “He said, ‘When the poorest of the poor taste the benefit of the free market system, they will never settle for a government that won’t let them have access to that system.’” That summary, says Ford, “is one of the great distillations of truth I had ever heard.”
While Rwanda’s economic transformation, as envisioned by President Kagame, is well underway, it has not been without its obstacles. Even though Rwanda’s transformation into a producer of premium coffee beans was gaining momentum in the mid-2000s, smallholder farmers were still earning subsistence income because of a few international coffee buyers who were keeping prices paid to farmers artificially low. “It was in a moment of rage about the price manipulation and its effect on the smallholder farmers that I decided to get into the coffee business,” says Ford. “I made a commitment to build a coffee plant, to go into economic warfare with these [international buyers].” Thus, Westrock Coffee was born.
In building the business, Ford espoused a direct trade model, paying farmers as much as possible while still enabling the company to make a profit. He launched Rwanda Trading Company, a Westrock subsidiary that operates at origin and works directly with local farmers to buy, mill, process, sell and export Rwandan coffee worldwide. And Westrock created a two-year agri-business training program for farmers.
He explains that in order to be most effective at creating a profit for the company and the farmers, “we have to be able to get the most for the coffee as it goes into the commercial marketplace.” That hinges on the three things consumers will pay more for: traceability — for people to see the ownership chain all the way down to the individual farmer; transparency — to see the price at each step through that chain; and sustainability — not just agriculturally and environmentally, but also as a means of providing a living wage to the farmers.
Westrock was built with those three principles in mind. “We are actually on every farm, with every farmer who participates in our agri-business training program, at some point every year,” says Ford. The training program for farmers is intensive, encompassing everything from financial education and planning to pruning schedules and fertilization techniques to community development. “Rather than just providing a certificate that there is no child labor and farmers get a fair price, we are actually on the ground, teaching them,” asserts Ford. Today, the agri-business training program is active in Rwanda and Tanzania, with over 16,000 enrollees and graduates, and Westrock Coffee Company now sources coffee from eighteen countries across East Africa, Central and South America and Asia.
“Sustainability equals profitability,” says Ford. “Communities capture the benefit of the local merchants — and the traders and farmers then, collectively, take the economic power of what they do individually and invest it back in their communities, so that you get running water, infrastructure, power, and education. So what we are trying to do in Rwanda is be the engine that helps them create their own ecosystem — just like that ecosystem was generated here, in Arkansas, sixty or seventy years ago.”